1997 (2) TMI 326 - AT - Customs

Summary

Issues:
1. Whether the goods were liable to confiscation and penalty for not conforming to the declaration requirements.
2. Whether the goods were considered prohibited under the Export (Control) Order and the Foreign Exchange Regulation Act.
3. The impact of the repeal of the Export (Control) Order on the liability of the goods.
4. The interpretation of Section 12(1) of the Foreign Exchange Regulation Act regarding the declaration requirements.

Analysis:

1. The exporter filed shipping bills for export of goods described as dyed printed polyester viscose blended fabrics. However, analysis revealed discrepancies in the declared yarn quality. The Deputy Commissioner ordered confiscation and penalty, which was set aside by the Commissioner (Appeals) on the grounds that the goods were not prohibited or dutiable, and the exporter was not liable for penalty. The appeal challenged this decision.

2. The Departmental Representative argued that the goods were prohibited under the Export (Control) Order and the Foreign Exchange Regulation Act due to non-conformity with the declaration requirements. Citing a Supreme Court decision, it was contended that the goods were liable to confiscation as the export was banned under relevant provisions.

3. The Export (Control) Order had been repealed before the export, rendering the goods not liable to confiscation on that ground. Referring to a Supreme Court decision, it was highlighted that a declaration under Section 12(1) of the Foreign Exchange Regulation Act was primarily about payment of export value, and non-contravention of this did not warrant penalty.

4. Sections 12(1) and 23A of the Act corresponded to relevant sections of the Foreign Exchange Regulation Act. Following the Supreme Court's interpretation, goods with a declaration under Section 12(1) were not "prohibited goods" for Customs Act purposes. Consequently, since the goods were not dutiable, they were not subject to confiscation under Section 113. The decision of the Collector (Appeals) was upheld, and the appeal was dismissed.